He was at least prepared to discuss the release from house arrest of pro-democracy leader Aung San Suu Kyi.

Witnesses have told the BBC they have seen soldiers taking up position outside Khin Nyunt's house in Rangoon.

"We can confirm that Khin Nyunt has been removed from the position of prime minister and is being detained under house
arrest," said Thai government spokesman Jakrapob Penkair in Bangkok.

"The person who signed the order said Khin Nyunt had been involved in corruption and not suitable to stay in his position," he added.

The secretive military government in Burma has yet to confirm or deny the reports, which have come from both Thai officials, Indian intelligence sources and other unofficial sources inside Burma.

Khin Nyunt was also head of military intelligence, and several companies run by the intelligence service have been shut down in recent days, amid reports that intelligence officials have been arrested.

There was an increased troop presence outside military intelligence headquarters in the city, witnesses said.

Losing grip on power

As Prime Minister, Khin Nyunt has relied upon Burma's secret police to shore up his power.

But Senior General Than Shwe and his number two, Maung Aye, hold the loyalty of the key factions within the army.

Amid mounting signs of disagreement within the high echelons of Burma's military hierarchy, a cabinet reshuffle last month promoted so-called hardliners at the expense of others who - like Khin Nyunt - took a more open stance.

Consequently Khin Nyunt's position has weakened of late, and it now seems like hard-line forces have prevailed, according to our correspondent.

Khin Nyunt was seen as favouring talks with pro-democracy leader Aung San Suu Kyi, and soon after his appointment announced a seven-point roadmap to democracy.

But Than Shwe remains strongly opposed to any role for the Nobel laureate.

Her release was widely expected prior to the resumption of the National Convention in May but Aung San Suu Kyi remains under house arrest.